Public debt rises to a record 268.1 billion euros

The public debt, from the point of view of Maastricht, rose by 1.1 billion euros in October to 268,146 million euros, after having fallen slightly in September, according to data released this Wednesday by the Bank of Portugal. This is a new maximum, surpassing the record reached in August (267,114 million euros).

By September, public debt had fallen slightly, but the trajectory of public debt stock has risen since the pandemic crisis took hold, averting the prospect of declines that the arrival of budget surpluses had given. In October, the rise to a new record reflected, to a large extent, by “an increase in debt securities €1.1 billion,” explains the Bank of Portugal.

As a percentage of GDP, public debt reached 130.6% in Q3, rising from 126% of GDP in Q2. This evolution is explained by the increase in budget deficit, but mainly by the abrupt fall in GDP due to the pandemic. The recovery registered in Q2r supported the rise, but did not prevent it.

With this rise to 130% of GDP, the public debt ratio returns, albeit temporarily, to a level seen in Q3 2017, when the ratio reached 131.3%. Since then, until the pandemic, the weight of public debt had fallen to 117.7% in the Q4 2019. In Q1, already due to the virus, the ratio rose to 119.5%.

The government’s expectation, according to the proposed State Budget for 2021 (OE 2021), is to end the year with a public debt of 134.8% of GDP, a more optimistic forecast than the 137.2% of GDP forecast by the International Monetary Fund (IMF).